Robert Rogers, CPA, owns a computer that is used in his consultancy services. As per the matching principle, the related account that should appear on the income statement for the year ended December 31, 2014 is:
A)Depreciation Expense.
B)Service Revenue.
C)Accumulated Depreciation.
D)Equipment Expense.

Question

Quizplus · Accepted Answer

The matching principle states that expenses incurred to generate revenues should be recognized in the same period as the revenues they helped to generate. In this case, Robert Rogers, CPA, used a computer to provide consulting services, which generated Service Revenue. Therefore, the related account that should appear on the income statement is Depreciation Expense, as it represents the cost of using the computer to generate the Service Revenue.

Robert Rogers, CPA, Owns a Computer That Is Used in His